Performance Marketing is a comprehensive term that refers to online marketing and advertising programs in which advertisers (a.k.a., “retailers” or “merchants”) and marketing companies (a.k.a, “affiliates” or “publishers”) are paid when a specific action is completed; such as a sale, lead or click.
Performance Marketing is a combination of advertising and innovation that helps retailers and affiliates grow their businesses in ever-changing ways. Campaigns are highly targeted for each retailer in such a way that everyone can be successful. Performance marketing done right creates win-win opportunities for both retailers and affiliates.
Unlike other forms of traditional advertising where fees are paid up front and do not depend upon the success of the ads, advertisers in performance marketing only pay for successful transactions. Performance marketing has successfully reversed the traditional value proposition of advertising and also allows for real-time measurement of ROI.
The various players include advertisers/merchants/retailers, networks, publishers/affiliates, outsourced program managers (a.k.a., OPMs), agencies, and solution providers. Companies range from small sole-proprietor businesses to publicly-traded Fortune 500 companies.
In addition to creating a unique value proposition for advertisers, affiliates are on the cutting edge of content creation, mobile apps, social media, and niche marketing.
Performance marketing is trackable and measurable down to the click. Advertisers can measure everything from the cost of acquisition to incrementality (e.g., new customers of new customers or average order value).